CHAPTER 3. THE USE TAX

Article 1. Imposition of Tax

California Constitutional Provision

SEC. 35.Imposition and rate of additional sales and use tax: public safety services.
(a) The people of the State of California find and declare all of the
following:

(1) Public safety services are critically important to the security and wellbeing
of the State's citizens and to the growth and revitalization of the State's
economic base.

(2) The protection of the public safety is the first responsibility of local
government and local officials have an obligation to give priority to the
provision of adequate public safety services.

(3) In order to assist local government in maintaining a sufficient level of
public safety services, the proceeds of the tax enacted pursuant to this section
shall be designated exclusively for public safety.

(b) In addition to any sales and use taxes imposed by the Legislature, the
following sales and use taxes are hereby imposed:

(1) For the privilege of selling tangible personal property at retail, a tax
is hereby imposed upon all retailers at the rate of ½ percent of the gross
receipts of any retailer from the sale of all tangible personal property sold at
retail in this State on and after January 1, 1994.

(2) An excise tax is hereby imposed on the storage, use, or other
consumption in this state of tangible personal property purchased from any
retailer on and after January 1, 1994, for storage, use, or other consumption
in this State at the rate of ½ percent of the sales price of the property.

(c) The Sales and Use Tax Law, including any amendments made thereto
on or after the effective date of this section, shall be applicable to the taxes
imposed by subdivision (b).

(d) (1) All revenues, less refunds, derived from the taxes imposed
pursuant to subdivision (b) shall be transferred to the Local Public Safety
Fund for allocation by the Legislature, as prescribed by statute, to counties
in which either of the following occurs:

(A) The board of supervisors, by a majority vote of its membership,
requests an allocation from the Local Public Safety Fund in a manner
prescribed by statute.

(B) A majority of the county's voters voting thereon approve the addition
of this section.

(2) Moneys in the Local Public Safety Fund shall be allocated for use
exclusively for public safety services of local agencies.

(e) Revenues derived from the taxes imposed pursuant to subdivision (b)
shall not be considered proceeds of taxes for purposes of Article XIII B or
state General Fund proceeds of taxes within the meaning of Article XVI.

(f) Except for the provisions of Section 34, this section shall supersede
any other provisions of this Constitution that are in conflict with the
provisions of this section, including, but not limited to, Section 9 of
Article II.

History.—Adopted by voters, Proposition 172, in effect November 3, 1993.

(C) Preventing child abuse, neglect, or exploitation; providing services to children and youth who are abused, neglected, or exploited, or who are at risk of abuse, neglect, or exploitation, and the families of those children; providing adoption services; and providing adult protective services.

(D) Providing mental health services to children and adults to reduce failure in school, harm to self or others, homelessness, and preventable incarceration or institutionalization.

(2) "2011 Realignment Legislation" means legislation enacted on or before September 30, 2012, to implement the state budget plan, that is entitled 2011 Realignment and provides for the assignment of Public Safety Services responsibilities to local agencies, including related reporting responsibilities. The legislation shall provide local agencies with maximum flexibility and control over the design, administration, and delivery of Public Safety Services consistent with federal law and funding requirements, as determined by the Legislature. However, 2011 Realignment Legislation shall include no new programs assigned to local agencies after January 1, 2012, except for the early periodic screening, diagnosis, and treatment (EPSDT) program and mental health managed care.

(b) (1) Except as provided in subdivision (d), commencing in the 2011-12 fiscal year and continuing thereafter, the following amounts shall be deposited into the Local Revenue Fund 2011, as established by Section 30025 of the Government Code, as follows:

(A) All revenues, less refunds, derived from the taxes described in Sections 6051.15 and 6201.15 of the Revenue and Taxation Code, as those sections read on July 1, 2011.

(B) All revenues, less refunds, derived from the vehicle license fees described in Section 11005 of the Revenue and Taxation Code, as that section read on July 1, 2011.

(2) On and after July 1, 2011, the revenues deposited pursuant to paragraph (1) shall not be considered General Fund revenues or proceeds of taxes for purposes of Section 8 of Article XVI of the California Constitution.

(c) (1) Funds deposited in the Local Revenue Fund 2011 are continuously appropriated exclusively to fund the provision of Public Safety Services by local agencies. Pending full implementation of the 2011 Realignment Legislation, funds may also be used to reimburse the State for program costs incurred in providing Public Safety Services on behalf of local agencies. The methodology for allocating funds shall be as specified in the 2011 Realignment Legislation.

(2) The county treasurer, city and county treasurer, or other appropriate official shall create a County Local Revenue Fund 2011 within the treasury of each county or city and county. The money in each County Local Revenue Fund 2011 shall be exclusively used to fund the provision of Public Safety Services by local agencies as specified by the 2011 Realignment Legislation.

(3) Notwithstanding Section 6 of Article XIII B, or any other constitutional provision, a mandate of a new program or higher level of service on a local agency imposed by the 2011 Realignment Legislation, or by any regulation adopted or any executive order or administrative directive issued to implement that legislation, shall not constitute a mandate requiring the State to provide a subvention of funds within the meaning of that section. Any requirement that a local agency comply with Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code, with respect to performing its Public Safety Services responsibilities, or any other matter, shall not be a reimbursable mandate under Section 6 of Article XIII B.

(4) (A) Legislation enacted after September 30, 2012, that has an overall effect of increasing the costs already borne by a local agency for programs or levels of service mandated by the 2011 Realignment Legislation shall apply to local agencies only to the extent that the State provides annual funding for the cost increase. Local agencies shall not be obligated to provide programs or levels of service required by legislation, described in this subparagraph, above the level for which funding has been provided.

(B) Regulations, executive orders, or administrative directives, implemented after October 9, 2011, that are not necessary to implement the 2011 Realignment Legislation, and that have an overall effect of increasing the costs already borne by a local agency for programs or levels of service mandated by the 2011 Realignment Legislation, shall apply to local agencies only to the extent that the State provides annual funding for the cost increase. Local agencies shall not be obligated to provide programs or levels of service pursuant to new regulations, executive orders, or administrative directives, described in this subparagraph, above the level for which funding has been provided.

(C) Any new program or higher level of service provided by local agencies, as described in subparagraphs (A) and (B), above the level for which funding has been provided, shall not require a subvention of funds by the State nor otherwise be subject to Section 6 of Article XIII B. This paragraph shall not apply to legislation currently exempt from subvention under paragraph (2) of subdivision (a) of Section 6 of Article XIII B as that paragraph read on January 2, 2011.

(D) The State shall not submit to the federal government any plans or waivers, or amendments to those plans or waivers, that have an overall effect of increasing the cost borne by a local agency for programs or levels of service mandated by the 2011 Realignment Legislation, except to the extent that the plans, waivers, or amendments are required by federal law, or the State provides annual funding for the cost increase.

(E) The State shall not be required to provide a subvention of funds pursuant to this paragraph for a mandate that is imposed by the State at the request of a local agency or to comply with federal law. State funds required by this paragraph shall be from a source other than those described in subdivisions (b) and (d), ad valorem property taxes, or the Social Services Subaccount of the Sales Tax Account of the Local Revenue Fund.

(5) (A) For programs described in subparagraphs (C) to (E), inclusive, of paragraph (1) of subdivision (a) and included in the 2011 Realignment Legislation, if there are subsequent changes in federal statutes or regulations that alter the conditions under which federal matching funds as described in the 2011 Realignment Legislation are obtained, and have the overall effect of increasing the costs incurred by a local agency, the State shall annually provide at least 50 percent of the nonfederal share of those costs as determined by the State.

(B) When the State is a party to any complaint brought in a federal judicial or administrative proceeding that involves one or more of the programs described in subparagraphs (C) to (E), inclusive, of paragraph (1) of subdivision (a) and included in the 2011 Realignment Legislation, and there is a settlement or judicial or administrative order that imposes a cost in the form of a monetary penalty or has the overall effect of increasing the costs already borne by a local agency for programs or levels of service mandated by the 2011 Realignment Legislation, the State shall annually provide at least 50 percent of the nonfederal share of those costs as determined by the State. Payment by the State is not required if the State determines that the settlement or order relates to one or more local agencies failing to perform a ministerial duty, failing to perform a legal obligation in good faith, or acting in a negligent or reckless manner.

(C) The state funds provided in this paragraph shall be from funding sources other than those described in subdivisions (b) and (d), ad valorem property taxes, or the Social Services Subaccount of the Sales Tax Account of the Local Revenue Fund.

(6) If the State or a local agency fails to perform a duty or obligation under this section or under the 2011 Realignment Legislation, an appropriate party may seek judicial relief. These proceedings shall have priority over all other civil matters.

(7) The funds deposited into a County Local Revenue Fund 2011 shall be spent in a manner designed to maintain the State's eligibility for federal matching funds, and to ensure compliance by the State with applicable federal standards governing the State's provision of Public Safety Services.

(8) The funds deposited into a County Local Revenue Fund 2011 shall not be used by local agencies to supplant other funding for Public Safety Services.

(d) If the taxes described in subdivision (b) are reduced or cease to be operative, the State shall annually provide moneys to the Local Revenue Fund 2011 in an amount equal to or greater than the aggregate amount that otherwise would have been provided by the taxes described in subdivision (b). The method for determining that amount shall be described in the 2011 Realignment Legislation, and the State shall be obligated to provide that amount for so long as the local agencies are required to perform the Public Safety Services responsibilities assigned by the 2011 Realignment Legislation. If the State fails to annually appropriate that amount, the Controller shall transfer that amount from the General Fund in pro rata monthly shares to the Local Revenue Fund 2011. Thereafter, the Controller shall disburse these amounts to local agencies in the manner directed by the 2011 Realignment Legislation. The state obligations under this subdivision shall have a lower priority claim to General Fund money than the first priority for money to be set apart under Section 8 of Article XVI and the second priority to pay voter-approved debts and liabilities described in Section 1 of Article XVI.

(e) (1) To ensure that public education is not harmed in the process of providing critical protection to local Public Safety Services, the Education Protection Account is hereby created in the General Fund to receive and disburse the revenues derived from the incremental increases in taxes imposed by this section, as specified in subdivision (f).

(2) (A) Before June 30, 2013, and before June 30 of each year from 2014 to 2018, inclusive, the Director of Finance shall estimate the total amount of additional revenues, less refunds, that will be derived from the incremental increases in tax rates made in subdivision (f) that will be available for transfer into the Education Protection Account during the next fiscal year. The Director of Finance shall make the same estimate by January 10, 2013, for additional revenues, less refunds, that will be received by the end of the 2012-13 fiscal year.

(B) During the last 10 days of the quarter of each of the first three quarters of each fiscal year from 2013-14 to 2018-19, inclusive, the Controller shall transfer into the Education Protection Account one-fourth of the total amount estimated pursuant to subparagraph (A) for that fiscal year, except as this amount may be adjusted pursuant to subparagraph (D).

(C) In each of the fiscal years from 2012-13 to 2020-21, inclusive, the Director of Finance shall calculate an adjustment to the Education Protection Account, as specified by subparagraph (D), by adding together the following amounts, as applicable:

(i) In the last quarter of each fiscal year from 2012-13 to 2018-19, inclusive, the Director of Finance shall recalculate the estimate made for the fiscal year pursuant to subparagraph (A), and shall subtract from this updated estimate the amounts previously transferred to the Education Protecion Account for that fiscal year.

(ii) In June 2015 and in every June from 2016 to 2021, inclusive, the Director of Finance shall make a final determination of the amount of additional revenues, less refunds, derived from the incremental increases in tax rates made in subdivision (f) for the fiscal year ending two years prior. The amount of the updated estimate calculated in clause (i) for the fiscal year ending two years prior shall be subtracted from the amount of this final determination.

(D) If the sum determined pursuant to subparagraph (C) is positive, the Controller shall transfer an amount equal to that sum into the Education Protection Account within 10 days preceding the end of the fiscal year. If that amount is negative, the Controller shall suspend or reduce subsequent quarterly transfers, if any, to the Education Protection Account until the total reduction equals the negative amount herein described. For purposes of any calculation made pursuant to clause (i) of subparagraph (C), the amount of a quarterly transfer shall not be modified to reflect any suspension or reduction made pursuant to this subparagraph.

(3) All moneys in the Education Protection Account are hereby continuously appropriated for the support of school districts, county offices of education, charter schools, and community college districts as set forth in this paragraph.

(A) Eleven percent of the moneys appropriated pursuant to this paragraph shall be allocated quarterly by the Board of Governors of the California Community Colleges to community college districts to provide general purpose funding to community college districts in proportion to the amounts determined pursuant to Section 84750.5 of the Education Code, as that code section read upon voter approval of this section. The allocations calculated pursuant to this subparagraph shall be offset by the amounts specified in subdivisions (a), (c), and (d) of Section 84751 of the Education Code, as that section read upon voter approval of this section, that are in excess of the amounts calculated pursuant to Section 84750.5 of the Education Code, as that section read upon voter approval of this section, provided that no community college district shall receive less than one hundred dollars ($100) per full time equivalent student.

(B) Eighty-nine percent of the moneys appropriated pursuant to this paragraph shall be allocated quarterly by the Superintendent of Public Instruction to provide general purpose funding to school districts, county offices of education, and state general-purpose funding to charter schools in proportion to the revenue limits calculated pursuant to Sections 2558 and 42238 of the Education Code and the amounts calculated pursuant to Section 47633 of the Education Code for county offices of education, school districts, and charter schools, respectively, as those sections read upon voter approval of this section. The amounts so calculated shall be offset by the amounts specified in subdivision (c) of Section 2558 of, paragraphs (1) through (7) of subdivision (h) of Section 42238 of, and Section 47635 of, the Education Code for county offices of education, school districts, and charter schools, respectively, as those sections read upon voter approval of this section, that are in excess of the amounts calculated pursuant to Sections 2558, 42238, and 47633 of the Education Code for county offices of education, school districts, and charter schools, respectively, as those sections read upon voter approval of this section, provided that no school district, county office of education, or charter school shall receive less than two hundred dollars ($200) per unit of average daily attendance.

(4) This subdivision is self-executing and requires no legislative action to take effect. Distribution of the moneys in the Education Protection Account by the Board of Governors of the California Community Colleges and the Superintendent of Public Instruction shall not be delayed or otherwise affected by failure of the Legislature and Governor to enact an annual budget bill pursuant to Section 12 of Article IV, by invocation of paragraph (h) of Section 8 of Article XVI, or by any other action or failure to act by the Legislature or Governor.

(5) Notwithstanding any other provision of law, the moneys deposited in the Education Protection Account shall not be used to pay any costs incurred by the Legislature, the Governor, or any agency of state government.

(6) A community college district, county office of education, school district, or charter school shall have sole authority to determine how the moneys received from the Education Protection Account are spent in the school or schools within its jurisdiction, provided, however, that the appropriate governing board or body shall make these spending determinations in open session of a public meeting of the governing board or body and shall not use any of the funds from the Education Protection Account for salaries or benefits of administrators or any other administrative costs. Each community college district, county office of education, school district, and charter school shall annually publish on its Internet Web site an accounting of how much money was received from the Education Protection Account and how that money was spent.

(7) The annual independent financial and compliance audit required of community college districts, county offices of education, school districts, and charter schools shall, in addition to all other requirements of law, ascertain and verify whether the funds provided from the Education Protection Account have been properly disbursed and expended as required by this section. Expenses incurred by those entities to comply with the additional audit requirement of this section may be paid with funding from the Education Protection Account, and shall not be considered administrative costs for purposes of this section.

(8) Revenues, less refunds, derived pursuant to subdivision (f) for deposit in the Education Protection Account pursuant to this section shall be deemed "General Fund revenues," "General Fund proceeds of taxes," and "moneys to be applied by the State for the support of school districts and community college districts" for purposes of Section 8 of Article XVI.

(f) (1) (A) In addition to the taxes imposed by Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code, for the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers at the rate of 1/4 percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in this State on and after January 1, 2013, and before January 1, 2017.

(B) In addition to the taxes imposed by Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code, an excise tax is hereby imposed on the storage, use, or other consumption in this State of tangible personal property purchased from any retailer on and after January 1, 2013, and before January 1, 2017, for storage, use, or other consumption in this state at the rate of 1/4 percent of the sales price of the property.

(C) The Sales and Use Tax Law, including any amendments enacted on or after the effective date of this section, shall apply to the taxes imposed pursuant to this paragraph.

(D) This paragraph shall become inoperative on January 1, 2017.

1, 2019, with respect to the tax imposed pursuant to Section 17041 of the Revenue and Taxation Code, the income tax bracket and the rate of 9.3 percent set forth in paragraph (1) of subdivision (a) of Section 17041 of the Revenue and Taxation Code shall be modified by each of the following:

(A) (i) For that portion of taxable income that is over two hundred fifty thousand dollars ($250,000) but not over three hundred thousand dollars ($300,000), the tax rate is 10.3 percent of the excess over two hundred fifty thousand dollars ($250,000).

(ii) For that portion of taxable income that is over three hundred thousand dollars ($300,000) but not over five hundred thousand dollars ($500,000), the tax rate is 11.3 percent of the excess over three hundred thousand dollars ($300,000).

(iii) For that portion of taxable income that is over five hundred thousand dollars ($500,000), the tax rate is 12.3 percent of the excess over five hundred thousand dollars ($500,000).

(B) The income tax brackets specified in clauses (i), (ii), and (iii) of subparagraph (A) shall be recomputed, as otherwise provided in subdivision (h) of Section 17041 of the Revenue and Taxation Code, only for taxable years beginning on and after January 1, 2013.

(C) (i) For purposes of subdivision (g) of Section 19136 of the Revenue and Taxation Code, this paragraph shall be considered to be chaptered on the date it becomes effective.

(ii) For purposes of Part 10 (commencing with Section 17001) of, and Part 10.2 (commencing with Section 18401) of, Division 2 of the Revenue and Taxation Code, the modified tax brackets and tax rates established and imposed by this paragraph shall be deemed to be established and imposed under Section 17041 of the Revenue and Taxation Code.

(D) This paragraph shall become inoperative on December 1, 2019.

(3) For any taxable year beginning on or after January 1, 2012, and before January 1, 2019, with respect to the tax imposed pursuant to Section 17041 of the Revenue and Taxation Code, the income tax bracket and the rate of 9.3 percent set forth in paragraph (1) of subdivision (c) of Section 17041 of the Revenue and Taxation Code shall be modified by each of the following:

(A) (i) For that portion of taxable income that is over three hundred forty thousand dollars ($340,000) but not over four hundred eight thousand dollars ($408,000), the tax rate is 10.3 percent of the excess over three hundred forty thousand dollars ($340,000).

(ii) For that portion of taxable income that is over four hundred eight thousand dollars ($408,000) but not over six hundred eighty thousand dollars ($680,000), the tax rate is 11.3 percent of the excess over four hundred eight thousand dollars ($408,000).

(iii) For that portion of taxable income that is over six hundred eighty thousand dollars ($680,000), the tax rate is 12.3 percent of the excess over six hundred eighty thousand dollars ($680,000).

(B) The income tax brackets specified in clauses (i), (ii), and (iii) of subparagraph (A) shall be recomputed, as otherwise provided in subdivision (h) of Section 17041 of the Revenue and Taxation Code, only for taxable years beginning on and after January 1, 2013.

(C) (i) For purposes of subdivision (g) of Section 19136 of the Revenue and Taxation Code, this paragraph shall be considered to be chaptered on the date it becomes effective.

(ii) For purposes of Part 10 (commencing with Section 17001) of, and Part 10.2 (commencing with Section 18401) of, Division 2 of the Revenue and Taxation Code, the modified tax brackets and tax rates established and imposed by this paragraph shall be deemed to be established and imposed under Section 17041 of the Revenue and Taxation Code.

(D) This paragraph shall become inoperative on December 1, 2019.

(g) (1) The Controller, pursuant to his or her statutory authority, may perform audits of expenditures from the Local Revenue Fund 2011 and any County Local Revenue Fund 2011, and shall audit the Education Protection Account to ensure that those funds are used and accounted for in a manner consistent with this section.

(2) The Attorney General or local district attorney shall expeditiously investigate, and may seek civil or criminal penalties for, any misuse of moneys from the County Local Revenue Fund 2011 or the Education Protection Account.

History.—Adopted by voters, Proposition 30, at the November 6, 2012 election, subdivision (b), operative as of July 1, 2011; paragraphs (2) and (3) of subdivision (f), operative as of January 1, 2012; all other provisions operative November 7, 2012.

6201. Imposition and rate of use tax. An excise tax is hereby
imposed on the storage, use, or other consumption in this state of tangible
personal property purchased from any retailer on or after July 1, 1935, for
storage, use, or other consumption in this state at the rate of 3 percent of the
sales price of the property, and at the rate of 2½ percent on and after July 1,
1943, and to and including June 30, 1949, and at the rate of 3 percent on and
after July 1, 1949, and to and including July 31, 1967, and at the rate of 4
percent on and after August 1, 1967, and to and including June 30, 1972, and
at the rate of 3¾ percent on and after July 1, 1972, and to and including June
30, 1973, and at the rate of 4¾ percent on and after July 1, 1973, and to and
including September 30, 1973, and at the rate of 3¾ percent on and after
October 1, 1973, and to and including March 31, 1974, and at the rate of 4¾
percent thereafter.

History.—Stats. 1943, p. 2919, in effect June 1, 1943, added provision for temporary 2½ percent rate and added
provisions for postwar reserve. Temporary reduction and postwar reserve were also provided for by Stats. 1943, p.
1581, in effect May 7, 1943. Stats. 1945, p. 1292, in effect June 5, 1945, continued temporary 2½ percent rate. Stats.
1947, p. 1866, in effect June 17, 1947, continued temporary 2½ percent rate, and deleted provisions for postwar reserve.
Stats. 1948, p. 16, in effect April 9, 1948, continued temporary 2½ percent rate. Stats. 1967, p. 2474, operative August 1,
1967, increased the rate to 4 percent. Stats. 1971, p. 2784, operative July 1, 1972, decreased tax rate to 3¾ percent.
Stats. 1972, Ch. 1406, effective December 26, 1972, repealed and reenacted the section operative June 1, 1973,
increasing the rate to 4¾ percent after May 31, 1973, and repeals this section if the Legislative Analyst does not make
the certification described in subdivision (c) of section 316.2 of Ch. 1 of the 1971 First Extraordinary Session. Stats.
1973, Ch. 67, effective May 29, 1973, delayed to July 1, 1973, the rate increase to 4¾ percent; Ch. 296, effective August
23, 1973, decreased the rate to 3¾ percent on October 1, 1973, and raised it to 4¾ percent on March 1, 1974, operative
October 1, 1973. Stats. 1991, Ch. 85, in effect June 30, 1991, operative July 1, 1991, added "on and after April 1, 1974,
and to and including June 30, 1991, and at the rate of 5 percent" after "March 31, 1974, and at the rate of 4¾ percent".
Stats. 1991, Ch. 88, in effect June 30, 1991". Stats. 1991, Ch. 117, in effect July 16, 1991, deleted "on and after April 1,
1974, and to and including July 14,1991, and at the rate of 5 percent" after "March 31, 1974, and at the rate of 4¾
percent."

Constitutionality.—The imposition of the tax upon the use of property after it has been brought into the state does not
violate either the Commerce Clause or the Fourteenth Amendment of the Federal Constitution. Felt & Tarrant
Manufacturing Co. v. Gallagher (1939) 306 U.S. 62.

Nature of the tax.—The use tax is an excise tax and not a property tax, and therefore the provisions of Article XIII of
the State Constitution have no application with respect to it. Douglas Aircraft Co., Inc. v. Johnson (1939) 13 Cal.2d
545.

Temporary use outside the State.—Switch engines purchased outside of California and brought into California within
six months of purchase for permanent use therein are subject to use tax even though they were temporarily used outside
of California prior to their being brought into the state. Atchison, Topeka and Santa Fe Railway Co. v. State Board of
Equalization (1956) 139 Cal.App.2d 411.

Contemplated use in California.—Parts and materials are purchased for use in California if at the time of purchase it is
contemplated that they might be used anywhere, including California, as the needs of the purchaser might require, and
they are in fact used in California. Western Contracting Corp. v. State Board of Equalization (1968) 265 Cal.App.2d
568.

Lease of Property Purchased Ex-Tax from Trustee in Bankruptcy.—The collection of use tax on receipts from leases of
property purchased by the lessor from a trustee in bankruptcy does not unlawfully interfere with the process of the
bankruptcy court. Debtor Reorganizers, Inc. v. State Board of Equalization (1976) 58 Cal.App.3d 691.

Use tax on railroad passenger cars discriminated against rail carrier.—Federal act prohibited assessment of California
use tax on rail passenger cars, where the use tax was not imposed on passenger aircraft and watercraft used by other
common carriers in interstate commerce. National Railroad Passenger Corp. v. State Board of Equalization (1986) 652
F.Supp. 923.

Gifts used when delivered to common carrier.-A gift occurs, and California use tax applies, when property is
delivered to a common carrier in California for shipment to a donee, whether the donee is inside or outside California.
Yamaha Corp. of America v. State Board of Equalization (1999) 73 Cal.App.4th 338.

6201.2. Imposition and rate of additional use tax. (a) In addition to
the taxes imposed by Section 6201 and any other provision of this part, an
excise tax is hereby imposed on the storage, use, or other consumption in
this state of tangible personal property purchased from any retailer on or
after July 15, 1991, for storage, use, or other consumption in this state at the
rate of ½ percent of the sales price of the property.

(b) All revenues received pursuant to this section shall be deposited in
the State Treasury to the credit of the Local Revenue Fund, as established
pursuant to Section 17600 of the Welfare and Institutions Code.

(c) This section shall cease to be operative on the first day of the first
month of the calendar quarter following notification to the board by the
Department of Finance of a final judicial determination by the California
Supreme Court or any California court of appeal that the revenues collected
pursuant to this section and Section 6051.2 and deposited in the Local
Revenue Fund are either of the following:

(1) "General Fund proceeds of taxes appropriated pursuant to Article XIII
B of the California Constitution," as used in subdivision (b) of Section 8 of
Article XVI of the California Constitution.

(2) "Allocated local proceeds of taxes," as used in subdivision (b) of
Section 8 of Article XVI of the California Constitution.

6201.3. Imposition and rate of additional use tax. In addition to the
taxes imposed by Sections 6201, 6201.2, 6201.5, and any other provision of
this part, an excise tax is hereby imposed on the storage, use, or other
consumption in this state of tangible personal property purchased fromany
retailer on and after July 15, 1991, and purchased during any period in which
this section is operative pursuant to Section 6201.4 at the rate of ¼ percent
of the sales price of the property.

6201.4. Operative date of rate increase. (a) Section 6201.3 shall be
operative with respect to the storage, use, or other consumption in this state
of tangible personal property purchased from any retailer on and after July
15, 1991, but shall cease to be operative during any period described in
subdivision (c) or (d).

(b) On or before November 1, 1993, and on or before every November 1
thereafter, the Director of Finance shall determine and certify to the
Governor, the Legislature, and the board both of the following:

(1) Whether the amount in the Special Fund for Economic Uncertainties,
as established pursuant to Section 16418 of the Government Code, as of June
30 of the prior fiscal year exceeded 4 percent of General Fund revenues for
that prior fiscal year.

(2) Whether the estimated amount in the Special Fund for Economic
Uncertainties as of June 30 of the current fiscal year (without inclusion of
any revenue derived pursuant to Section 6201.3 on and after January 1 of the
current fiscal year) exceeds 4 percent of General Fund revenues for the
current fiscal year.

(c) Section 6201.3 shall cease to be operative on and after January 1,
1994, if on or before November 1, 1993, the Director of Finance certifies
pursuant to subdivision (b) that both amounts certified pursuant to paragraphs
(1) and (2) of that subdivision exceed 4 percent of General Fund revenues
for the respective fiscal year for which each amount is determined and
certified.

(d) Section 6201.3 shall cease to be operative on and after January 1
following any November 1 in which Section 6201.3 is operative and the
Director of Finance certifies pursuant to subdivision (b) that both amounts
certified pursuant to paragraphs (1) and (2) of that subdivision exceed 4
percent of General Fund revenues for the respective fiscal year for which
each amount is determined and certified.

(e) Section 6201.3 shall become operative on and after January 1
following any November 1 in which Section 6201.3 is inoperative and the
Director of Finance certifies pursuant to paragraph (2) of subdivision (b) that
the estimated amount does not exceed 4 percent of the General Fund revenues
as of June 30 of the current fiscal year.

History.—Added by Stats. 1991, Ch. 117, in effect July 16, 1991.

6201.45. Operative date of tax. Notwithstanding 6201.4 or any other
provision of law, the state use tax rate in Section 6201.3 shall not be operative
in any calendar year beginning on or after January 1, 2002, if the Director of
Finance determines both of the following:

(a) The General Fund reserve is 3 percent of revenues excluding the
revenues derived from the ¼ cent sales and use tax rate.

(b) Actual General Fund revenues for the period May 1 through
September 30 equal or exceed the May Revision forecast, prior to the
November 1 determination.

The Director of Finance shall make the determination on or before
November 1 of each year.

The ¼ cent reduction shall be operative for each calendar year commencing
on the next January 1 after the determination is made.

6201.5.Imposition and rate of additional use tax; Fiscal Recovery Fund.
(a) In addition to the taxes imposed by Section 6201 and any other provision of this part, an excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property purchased from any retailer at the rate of one-quarter of 1 percent of the sales price of the property.

(b) All revenues, net of refunds, received pursuant to this section shall be deposited in the State Treasury to the credit of the Fiscal Recovery Fund, as established pursuant to Section 99008 of the Government Code.

(c) Revenues received pursuant to this section accruing to the Fiscal Recovery Fund shall not be considered to be "State General Fund proceeds
of taxes appropriated pursuant to Article XIII B" within the meaning of either Section 8 of Article XVI of the California Constitution or Section 41202 of the Education Code.

(d) This section shall become operative on July 1, 2004, and shall cease to be operative on the first day of the first calendar quarter commencing
more than 90 days following a notification to the board by the Director of Finance pursuant to subdivision (b) of Section 99006 of the Government Code.

6201.6. Exemption from tax; aircraft common carriers. There are
exempted from the taxes imposed by Section 6201.5 the storage, use, or
other consumption in this state of tangible personal property, other than fuel
or petroleum products, to operators of aircraft to be used or consumed
principally outside the county in which the sale is made and directly and
exclusively in the use of the aircraft as common carriers of persons or
property under the authority of the laws of this state, the United States, or
any foreign government.

6201.7. Imposition and rate of additional use tax. (a) In addition to
the taxes imposed by Section 6201 and any other provision of this part, an
excise tax is hereby imposed on the storage, use, or other consumption in
this state of tangible personal property purchased from any retailer for
storage, use, or other consumption in this state, at the rate of 1 percent of the
sales price of the property, on and after April 1, 2009.

(b) This section shall cease to be operative on July 1, 2011, unless the
Director of Finance makes the notification pursuant to Section 99040 of the
Government Code, in which case this section shall cease to be operative on
July 1, 2012.

6201.8. Diesel fuel: use tax rate increase. (a) Except as provided by Section 6357.3, in addition to the taxes imposed by this part, an excise tax is hereby imposed on the storage, use, or other consumption in this state of diesel fuel, as defined in Section 60022, at the rate of 1.75 percent of the sales price of the diesel fuel on and after the operative date of this subdivision.

(b) Notwithstanding subdivision (a), for the 2011-12 fiscal year only, the rate referenced in subdivision (a) shall be 1.87 percent.

(c) Notwithstanding subdivision (a), for the 2012-13 fiscal year only, the rate referenced in subdivision (a) shall be 2.17 percent.

(d) Notwithstanding subdivision (a), for the 2013-14 fiscal year only, the rate referenced in subdivision (a) shall be 1.94 percent.

(e) Notwithstanding subdivision (b) of Section 7102, all of the revenues, less refunds, collected pursuant to this section shall be estimated by the State Board of Equalization, with the concurrence of the Department of Finance, and transferred quarterly to the Public Transportation Account in the State Transportation Fund for allocation pursuant to Section 99312.1 of the Public Utilities Code.

(f) Subdivisions (a) to (e), inclusive, shall become operative on July 1, 2011.

6201.15. Local Revenue Fund 2011. (a) Notwithstanding Section 7101 or any other law, the amount of revenues, net of refunds, collected pursuant to Section 6201 and attributable to a rate of 1.0625 percent shall, subject to subdivision (b), be deposited in the State Treasury to the credit of the Local Revenue Fund 2011, as established pursuant to Section 30025 of the Government Code, and shall be used exclusively for the public safety purposes for which that fund is created.

(b) The amount of revenues derived from any tax or tax increase enacted after July 1, 2011, that is deposited in the Local Revenue Fund 2011 shall be applied to reduce the amount otherwise required to be deposited in that fund pursuant to subdivision (a).

6202. Liability for tax. (a) Every person storing, using, or otherwise
consuming in this state tangible personal property purchased from a retailer is
liable for the tax. His or her liability is not extinguished until the tax has been
paid to this state except that a receipt from a retailer engaged in business in
this state or from a retailer who is authorized by the board, under the rules
and regulations as it may prescribe, to collect the tax and who is, for the
purposes of this part relating to the use tax, regarded as a retailer engaged in
business in this state, given to the purchaser pursuant to Section 6203, is
sufficient to relieve the purchaser from further liability for the tax to which
the receipt refers.

(b) Notwithstanding any other provision, when a person purchases a
vessel or aircraft from another person through a broker, the purchaser's
liability for use tax is relieved if the purchaser has paid an amount as sales or
use tax to the broker, and the purchaser obtains and retains a receipt from the
broker showing the payment of that tax to the broker.

(c) Notwithstanding any other provision, when a person purchases a
vessel or aircraft from another person through a broker, if the broker collects
from the purchaser an amount as sales or use tax, the broker shall be liable
for that amount under Section 6204 as if the broker were a retailer engaged
in business in this state required to collect that amount as use tax from the
purchaser, and that amount constitutes a debt owed by the broker to this
state.

History.—Stats. 1957, p. 2019, in effect September 11, 1957, substituted "engaged in" for "maintaining a place of" in
second sentence. Stats. 1995, Ch. 555, in effect January 1, 1996, added subdivision letter designation (a) before first
paragraph, substituted "state" for "State" throughout the first paragraph, added "or her" after "His" and substituted
"the" for "such" after "under" in the second sentence of the first paragraph; and added subdivisions (b) and (c).

Liability of county for tax.—A county purchasing property consisting mostly of books for the county library must pay
the use tax thereon when the circumstances would call for payment of the tax had the purchases been made by a private
individual or organization, where, by the express terms of the statute, its provisions are made applicable to a county.
People v. Imperial County, (1946) 76 Cal.App.2d 572.

6202.5. Acquisitions of endangered or threatened animals and
plants. Any retailer, other than a nonprofit zoological society as defined in
subdivision (c) of Section 6010.50, that stores, uses, or otherwise consumes
in this state endangered or threatened animal or plant species, as defined in
subdivision (b) of Section 6010.50, acquired through a trade or exchange
with a nonprofit zoological society, shall be liable for the use tax.

6202.7. Loans of automobiles to university officials. Any retailer
who loans any motor vehicle to any employee of the University of California
or the California State University shall be liable for the use tax on the loan of
that vehicle equal to the amount of tax that would have applied if the vehicle
had been leased at fair rental value for a time period equal to the period the
vehicle is loaned to the university or state university employee, provided that
all of the following conditions are met:

(a) The vehicle is for the employee's exclusive use.

(b) The loan of the vehicle has been approved by the chancellor of the
university or the president of the state university.

(c) It is demonstrated that the loan of the vehicle is not dependent upon the
retailer receiving any automotive-related business from the university or the
state university.

History.—Added by Stats. 1996, Ch. 366, in effect August 19, 1996, but operative January 1, 1997.

6203. Collection by retailer. (a) Except as provided by Sections 6292
and 6293, every retailer engaged in business in this state and making sales of
tangible personal property for storage, use, or other consumption in this state,
not exempted under Chapter 3.5 (commencing with Section 6271) or Chapter
4 (commencing with Section 6351), shall, at the time of making the sales or,
if the storage, use, or other consumption of the tangible personal property is
not then taxable hereunder, at the time the storage, use, or other consumption
becomes taxable, collect the tax from the purchaser and give to the purchaser
a receipt therefor in the manner and form prescribed by the board.

(b) As respects leases constituting sales of tangible personal property, the
tax shall be collected from the lessee at the time amounts are paid by the
lessee under the lease.

(c) "Retailer engaged in business in this state" as used in this section and
Section 6202 means and includes any of the following:

(1) Any retailer maintaining, occupying, or using, permanently or
temporarily, directly or indirectly, or through a subsidiary, or agent, by
whatever name called, an office, place of distribution, sales or sample room
or place, warehouse or storage place, or other place of business.

(2) Any retailer having any representative, agent, salesperson, canvasser,
independent contractor, or solicitor operating in this state under the authority
of the retailer or its subsidiary for the purpose of selling, delivering, installing,
assembling, or the taking of orders for any tangible personal property.

(3) As respects a lease, any retailer deriving rentals from a lease of
tangible personal property situated in this state.

(4) (A) Any retailer soliciting orders for tangible personal property by
mail if the solicitations are substantial and recurring and if the retailer
benefits from any banking, financing, debt collection, telecommunication, or
marketing activities occurring in this state or benefits from the location in
this state of authorized installation, servicing, or repair facilities.

(B) This paragraph shall become operative upon the enactment of any
congressional act that authorizes states to compel the collection of state sales
and use taxes by out-of-state retailers.

(5) Notwithstanding Section 7262, a retailer specified in paragraph (4), and not specified in paragraph (1), (2), or (3), is a "retailer
engaged in business in this state" for the purposes of this part and Part 1.5
(commencing with Section 7200) only.

(d) (1) For purposes of this section, "engaged in business in this state"
does not include the taking of orders from customers in this state through a
computer telecommunications network located in this state which is not
directly or indirectly owned by the retailer when the orders result from the
electronic display of products on that same network. The exclusion provided
by this subdivision shall apply only to a computer telecommunications
network that consists substantially of online communications services other
than the displaying and taking of orders for products.

(2) This subdivision shall become inoperative upon the operative date of
provisions of a congressional act that authorize states to compel the collection
of state sales and use taxes by out-of-state retailers.

(e) Except as provided in this subdivision, a retailer is not a "retailer
engaged in business in this state" under paragraph (2) of subdivision (c) if
that retailer's sole physical presence in this state is to engage in convention
and trade show activities as described in Section 513(d)(3)(A) of the Internal
Revenue Code, and if the retailer, including any of its representatives,
agents, salespersons, canvassers, independent contractors, or solicitors, does
not engage in those convention and trade show activities for more than 15
days, in whole or in part, in this state during any 12-month period and did
not derive more than one hundred thousand dollars ($100,000) of net income
from those activities in this state during the prior calendar year.
Notwithstanding the preceding sentence, a retailer engaging in convention
and trade show activities, as described in Section 513(d)(3)(A) of the Internal
Revenue Code, is a "retailer engaged in business in this state," and is liable
for collection of the applicable use tax, with respect to any sale of tangible
personal property occurring at the convention and trade show activities and
with respect to any sale of tangible personal property made pursuant to an
order taken at or during those convention and trade show activities.

(f) Any limitations created by this section upon the definition of "retailer
engaged in business in this state" shall apply only for purposes of tax liability
under this code. Nothing in this section is intended to affect or limit, in any
way, civil liability or jurisdiction under Section 410.10 of the Code of Civil
Procedure.

History.—Stats. 1957, p. 2019, in effect September 11, 1957, substituted "engaged in" for "maintaining a place of" in
first paragraph and added last paragraph. Stats. 1965, p. 5448, operative August 1, 1965, added in the first paragraph
"Except as provided by Section 6292 every" and "Chapters 3.5 or," and added second paragraph and (c). Stats. 1972, Ch.
973, effective August 16, 1972, inserted "and 6293" in the first sentence. Stats. 1984, Ch. 144, effective January 1, 1985,
added "(commencing with Section 6271)" after "Chapter 3.5" and "(commencing with Section 6351)" after "Chapter 4" in
first paragraph, deleted "of this part" before "shall" in first paragraph. Stats. 1987, Ch. 1145, effective January 1, 1988,
added paragraphs (d), (e), (f), (g), (h), (i). Stats. 1988, Ch. 60, in effect March 30, 1988, added paragraph (j). Stats. 1992, Ch.
902, in effect September 25, 1992, operative January 1, 1993, substituted "salesperson" for "salesman" after "agent",
added "independent contractor," after "canvasser," and added "installing, assembling" after "delivering," in subdivision
(b). Stats. 1994, Ch. 851, in effect September 27, 1994, but operative January 1, 1995, added subdivision (k). Stats. 1995,
Ch. 555, in effect January 1, 1996, substituted "and Section 6202" for "and the preceding" after "in this" in the third
paragraph; substituted "that" for "which" after "advertising" in subdivision (e); added paragraph designation "(1)" before
"Any retailer" and added paragraph (2) in subdivision (f); deleted former subdivision (g) which provided, "Any retailer
owned or controlled by the same interests which own or control any retailer engaged in business in the same or similar
line of business in this state"; relettered former subdivisions (h), (i), (j), and (k) as (g), (h), (i), and (j), respectively; added
"or" after "(g)," and deleted ", or (i)" in subdivision (i); deleted "either (i)" after "date of", substituted "a congressional
act" for "S. 1825 of the 103rd Congress of the United States" after "provisions of", and deleted "or (ii) substantially
similar provisions of another Congressional act" after " retailers" in subparagraph (A) of paragraph (1) of subdivision (j).
Stats. 1997, Ch. 620 (SB 1102), in effect January 1, 1998, deleted former subdivision (e) which provided, "Any retailer
who, pursuant to a contract with a broadcaster or publisher located in this state, solicits orders for tangible personal
property by means of advertising that is disseminated primarily to consumers located in this state and only secondarily
to bordering jurisdictions,"; deleted former subdivision (h) which provided, "Any retailer who, pursuant to a contract
with a cable television operator located in this state, solicits orders for tangible personal property by means of
advertising which is transmitted or distributed over a cable television system in this state,"; relettered former
subdivisions (f), (g) and (i) as (e), (f) and (h), respectively; and substituted "or (f)" for "(f), (g) or (h)" in subdivision (g).
Stats. 1997, Ch. 621 (AB 258), in effect October 3, 1997, operative April 1, 1998, added subdivision letter designations (a),
(b) and (c) before first, second and third paragraphs, respectively; numbered former subdivisions (a), (b), (c), (d), and the
second paragraph of former subdivision (d), and subdivisions (e), (f), and the second paragraph of former subdivision
(f), subdivision (g) and (h) as (1), (2), (3), (4), (5), (6), (7), (8), and (9), respectively; added paragraph (5), added
subparagraph letter (A) and (B) before the first and second paragraphs of paragraph (6), respectively, substituted
"paragraph" for "subdivision" after "(B) This" in subparagraph (B) paragraph (6), added paragraph (8), substituted
"paragraph (4), (5), (6), (7), or (8)" for "subdivision (d), (e), or (f)" after "specified in" in paragraph (9), and substituted
"paragraph (1), (2), or (3)" for "subdivision (a), (b), or (c)" after "specified in" in paragraph (9) of subdivision (c); and
added subdivision (e). Stats. 1998, Ch. 351, in effect January 1, 1999, deleted former paragraph (5) which provided, "Any
retailer who, pursuant to a contract with a broadcaster or publisher located in this state, solicits orders for tangible
personal property by means of advertising that is disseminated primarily to consumers located in this state and only
secondarily to bordering jurisdictions", deleted former paragraph (8) which provided, "Any retailer, who pursuant to a
contract with a cable television operator located in this state, solicits orders for tangible personal property by means of
advertising that is transmitted or distributed over a cable television system in this state", renumbered former
paragraphs (5), (6), (7), (8) and (9) as (5), (6) and (7), and made conforming paragraph numbering changes within
paragraph (7) of subdivision (c); deleted "earlier of the following dates: (A) The" after "inoperative upon the" in
paragraph (2) and deleted former subparagraph (B) which provided, "The date five years from the effective date of the
act adding this subdivision." of paragraph (2) of subdivision (d); and added subdivision (f). Stats. 1999, Ch. 865, (SB
1302), in effect January 1, 2000, deleted former paragraph (4) of subdivision (c) which provided, "Any retailer soliciting
orders for tangible personal property by means of a telecommunication or television shopping system (which utilizes
toll free numbers) which is intended by the retailer to be broadcast by cable television or other means of broadcasting,
to consumers located in this state."; deleted former paragraph (6) of subdivision (c) which provided, "Any retailer
having a franchisee or licensee operating under its trade name if the franchisee or licensee is required to collect the
tax under this section."; deleted "(5), or (6)" after "paragraph (4)" of former paragraph (7); and renumbered former
paragraphs (5) and (7) as (4) and (5) in subdivision (c). Stats. 2000, Ch. 617 (AB 330), in effect September 24, 2000,
operative January 1, 2001, substituted "15" for "seven" after "for more than", substituted "one hundred" for "ten" after
"derive more than", substituted "one hundred thousand dollars ($100,000) of net" for "ten thousand ($10,000) of gross"
after "derive more than" in subdivision (e); and substituted "Any limitations . . . Civil Procedure" for "The Legislature
finds and declares that the deletion of language by the act adding this subdivision that was contained in paragraphs
(5) and (8) of subdivision (c) is intended to codify the holdings of recent court cases" in subdivision (f). Stats. 2011, Ch. 313 (AB 155), in effect September 23, 2011, repealed Section 6203 as amended by Stats. 2011, Ch. 7, First Extraordinary Session (AB 28x), and added a new Section 6203 with the following changes: deleted "above" after "paragraph (4)" and after "(2), and (3)" in paragraph (5) of subdivision (b); substituted "its" for "his or her" after "including any of" and "($100,000)" for "(100,000)" after "thousand dollars" in the first sentence of subdivision (e); and substituted "apply only" for "only apply" after "this state" shall" in the first sentence of subdivision (f).

Note.—Chapter 313, Stats. 2011 (AB 155), in effect September 23, 2011 repealed and added Section 6203. The changes to Section 6203 as added by Chapter 313 are identified in the history notes above.

Constitutionality, construction.—The requirement that retailers collect the tax is valid. A foreign corporation not
qualified to do intrastate business in California, but represented in this state by two general agents, each of whom
occupies an office leased by the corporation and used exclusively for the furtherance of its business, maintains a place
of business in this state and may be required to collect the tax. Felt & Tarrant Manufacturing Co. v. Gallagher (1939)
306 U.S. 62.

Purchaser's liability to retailer.—The primary liability for the tax is upon the purchaser. Consequently, when a retailer
pays an amount of tax to the state in satisfaction of the liability imposed on him by this section, the law implies an
obligation on the part of the purchaser to reimburse the retailer for the amount so paid. Brandtjen & Kluge v. Fincher
(1941) 44 Cal.App.2d Supp. 939.

What constitutes maintaining place of business.—A foreign law book publishing company is maintaining a place of
business and making sales in this state and, therefore, required to collect the use tax from its customers, where it
maintains large libraries in law offices in the state, in return for the use of which its salesmen are allotted office space,
which it advertises as its local addresses, where in response to continuous solicitation of orders there is a regular flow
of books into this state, and where its salesmen receive initial installment payments, exercise a limited discretion in
respect of collections on delinquent accounts, and frequently consummate sales to customers to whom unordered books
are sent. West Publishing Co. v. Superior Court, San Francisco (1942) 20 Cal.2d 720.

Requiring the law book publishing company described in the preceding paragraph to collect the use tax with respect
to mail order sales to customers in this state as well as with respect to sales resulting from solicitation by its employees
here does not violate either the Commerce Clause or the Fourteenth Amendment of the Federal Constitution. People v.
West Publishing Co. (1950) 35 Cal.2d 80.

Insurance company not exempted.—An insurance company is not relieved from the responsibility of collecting a use
tax by the constitutional provision exempting it from state sales taxes, when it sells automobiles belonging to it to
private individuals, since the use tax is paid by the ultimate purchaser, not the insurance company. Beneficial Standard
Life Ins. Co. v. State Board of Equalization (1962) 199 Cal.App.2d 18.

Liability of retailer.—National bank which retailed checks to depositors and failed to collect the use tax due must pay
the same from its own funds. Bank of America v. State Board of Equalization (1962) 209 Cal.App.2d 780.

Sale outside state and leased back instate.—Where a California retailer sold two oil tankers with title and possession
passing out of state and where the vessels were immediately leased back to the retailer and were used in California in
intrastate commerce, the court held that the retailer was liable for the collection of the use tax. Union Oil Co. v. State
Board of Equalization (1963) 60 Cal.2d 441, appeal dismissed, 377 U.S. 404.

Out-of-state border stores do not have to collect use tax on over-the-counter credit sales.—A retailer otherwise engaged
in business in California does not have to collect California use tax on over-the-counter credit sales at the retailer's
stores in Klamath Falls, Oregon, and Reno, Nevada, to customers with charge accounts bearing a California address.
Montgomery Ward & Co. v. State Board of Equalization (1969) 272 Cal.App.2d 728, cert. denied (1970) 396 U.S.
1040.

Seller's in-state offices not related to mail order sales.—An out-of-state seller must collect use tax on its mail order
sales, even though the seller's in-state offices only solicited advertising which was unrelated to the mail order sales.
The seller's offices gained advantages of municipal services, and satisfied commerce clause and due process requirement
of some definite link, or minimum connection, between the state and the retailer. National Geographic Society v.
California Board of Equalization (1977) 430 U.S. 551.

Tax Injunction Act No Bar to Federal Jurisdiction.—A direct mail advertising and trade association brought an action,
based on the Commerce Clause and the Due Process Clause of the U.S. Constitution, challenging the requirement that
interstate mail order retailers collect use tax from their California customers. The court held that the Tax Injunction Act
did not apply to bar federal jurisdiction over the matter. It rejected the Board's argument that the association members
had a plain, speedy, and efficient remedy under state law since they could pay the contested taxes and file for a refund.
Direct Marketing Association, Inc. v. Bennett (9th Cir., 1990) 916 F.2d 1451.

Retailer's use of teachers to solicit orders from students.—The taxpayer's use of teachers and school librarians to
solicit sales from students constituted sufficient nexus to require the taxpayer to collect use taxes imposed on the
students' purchases. Once the teachers and librarians undertook to solicit orders, they were acting under the taxpayer's
authority as its agents and taxpayer owed tax measured by the selling price to the students. Scholastic Book Clubs, Inc.
v. State Board of Equalization (1989) 207 Cal.App.3d 734.

Related corporation's liability for use tax collection.—A corporation who had no physical presence in California was
not required to collect use tax under former subdivision (g) based on the physical presence of a related corporation in
California. Current, Inc. v. State Board of Equalization (1994) 24 Cal.App.4th 382.

Online retailer had sufficient presence in state through representative accepting purchaser's returns.—An out-of-state
retailer must collect use tax arising from its sales, where its in-state representative accepts returns from the retailer's
purchasers. The in-state representative was authorized to take the returns, and the taking of returns is part of the selling
process. Borders Online, LLC v. State Board of Equalization (2005) 129 Cal.App.4th 1179."

6203. Collection by retailer. (a) Except as provided by Sections 6292 and 6293, every retailer engaged in business in this state and making sales of
tangible personal property for storage, use, or other consumption in
this state, not exempted under Chapter 3.5 (commencing with Section
6271) or Chapter 4 (commencing with Section 6351), shall, at the time
of making the sales or, if the storage, use, or other consumption of
the tangible personal property is not then taxable hereunder, at the
time the storage, use, or other consumption becomes taxable, collect
the tax from the purchaser and give to the purchaser a receipt
therefor in the manner and form prescribed by the board.

(b) As respects leases constituting sales of tangible personal
property, the tax shall be collected from the lessee at the time
amounts are paid by the lessee under the lease.

(c) "Retailer engaged in business in this state" as used in this
section and Section 6202 means any retailer that has substantial
nexus with this state for purposes of the commerce clause of the
United States Constitution and any retailer upon whom federal law
permits this state to impose a use tax collection duty. "Retailer
engaged in business in this state" specifically includes, but is not
limited to, any of the following:

(1) Any retailer maintaining, occupying, or using, permanently or
temporarily, directly or indirectly, or through a subsidiary, or
agent, by whatever name called, an office, place of distribution,
sales or sample room or place, warehouse or storage place, or other
place of business.

(2) Any retailer having any representative, agent, salesperson,
canvasser, independent contractor, or solicitor operating in this
state under the authority of the retailer or its subsidiary for the
purpose of selling, delivering, installing, assembling, or the taking
of orders for any tangible personal property.

(3) As respects a lease, any retailer deriving rentals from a
lease of tangible personal property situated in this state.

(4) Any retailer that is a member of a commonly controlled group,
as defined in Section 25105, and is a member of a combined reporting
group, as defined in paragraph (3) of subdivision (b) of Section
25106.5 of Title 18 of the California Code of Regulations, that
includes another member of the retailer's commonly controlled group
that, pursuant to an agreement with or in cooperation with the
retailer, performs services in this state in connection with tangible
personal property to be sold by the retailer, including, but not
limited to, design and development of tangible personal property sold
by the retailer, or the solicitation of sales of tangible personal
property on behalf of the retailer.

(5) (A) Any retailer entering into an agreement or agreements
under which a person or persons in this state, for a commission or
other consideration, directly or indirectly refer potential
purchasers of tangible personal property to the retailer, whether by
an Internet-based link or an Internet Web site, or otherwise,
provided that both of the following conditions are met:

(i) The total cumulative sales price from all of the retailer's
sales, within the preceding 12 months, of tangible personal property
to purchasers in this state that are referred pursuant to all of
those agreements with a person or persons in this state, is in excess
of ten thousand dollars ($10,000).

(ii) The retailer, within the preceding 12 months, has total
cumulative sales of tangible personal property to purchasers in this
state in excess of one million dollars ($1,000,000).

(B) An agreement under which a retailer purchases advertisements
from a person or persons in this state, to be delivered on
television, radio, in print, on the Internet, or by any other medium,
is not an agreement described in subparagraph (A), unless the
advertisement revenue paid to the person or persons in this state
consists of commissions or other consideration that is based upon
sales of tangible personal property.

(C) Notwithstanding subparagraph (B), an agreement under which a
retailer engages a person in this state to place an advertisement on
an Internet Web site operated by that person, or operated by another
person in this state, is not an agreement described in subparagraph
(A), unless the person entering the agreement with the retailer also
directly or indirectly solicits potential customers in this state
through use of flyers, newsletters, telephone calls, electronic mail,
blogs, microblogs, social networking sites, or other means of direct
or indirect solicitation specifically targeted at potential
customers in this state.

(D) For purposes of this paragraph, "retailer" includes an entity
affiliated with a retailer within the meaning of Section 1504 of the
Internal Revenue Code.

(E) This paragraph shall not apply if the retailer can demonstrate
that the person in this state with whom the retailer has an
agreement did not engage in referrals in the state on behalf of the
retailer that would satisfy the requirements of the commerce clause
of the United States Constitution.

(d) Except as provided in this subdivision, a retailer is not a
"retailer engaged in business in this state" under paragraph (2) of
subdivision (c) if that retailer's sole physical presence in this
state is to engage in convention and trade show activities as
described in Section 513(d)(3)(A) of the Internal Revenue Code, and
if the retailer, including any of his or her representatives, agents,
salespersons, canvassers, independent contractors, or solicitors,
does not engage in those convention and trade show activities for
more than 15 days, in whole or in part, in this state during any
12-month period and did not derive more than one hundred thousand
dollars ($100,000) of net income from those activities in this state
during the prior calendar year. Notwithstanding the preceding
sentence, a retailer engaging in convention and trade show
activities, as described in Section 513(d)(3)(A) of the Internal
Revenue Code, is a "retailer engaged in business in this state," and
is liable for collection of the applicable use tax, with respect to
any sale of tangible personal property occurring at the convention
and trade show activities and with respect to any sale of tangible
personal property made pursuant to an order taken at or during those
convention and trade show activities.

(e) Any limitations created by this section upon the definition of
"retailer engaged in business in this state" shall only apply for
purposes of tax liability under this code. Nothing in this section is
intended to affect or limit, in any way, civil liability or
jurisdiction under Section 410.10 of the Code of Civil Procedure.

6203.5. Worthless accounts. (a) A retailer is relieved from liability
to collect use tax that became due and payable, insofar as the measure of the
tax is represented by accounts that have been found to be worthless and
charged off for income tax purposes by the retailer or, if the retailer is not
required to file income tax returns, charged off in accordance with generally
accepted accounting principles. A retailer that has previously paid the amount
of the tax may, under rules and regulations prescribed by the board, take as a
deduction the amount found worthless and charged off by the retailer. If
these accounts are thereafter in whole or in part collected by the retailer, the
amount collected shall be included in the first return filed after the collection
and the amount of the tax shall be paid with the return. For purposes of this
subdivision, the term "retailer" shall include any entity affiliated with the
retailer under Section 1504 of Title 26 of the United States Code.

(b) (1) In the case of accounts held by a lender, a retailer or lender that
makes a proper election under paragraph (4) shall be entitled to a deduction
or refund of the tax that the retailer has previously reported and paid if all of
the following conditions are met:

(A) A deduction was not previously claimed or allowed on any portion of
the accounts.

(B) The accounts have been found worthless and written off by the lender
in accordance with the requirements of subdivision (a).

(C) The contract between the retailer and the lender contains an
irrevocable relinquishment of all rights to the account from the retailer to the
lender.

(D) The retailer remitted the tax on or after January 1, 2000.

(E) The party electing to claim the deduction or refund under paragraph
(4) files a claim in a manner prescribed by the board.

(2) If the retailer or the lender thereafter collects in whole or in part any
accounts, one of the following shall apply:

(A) If the retailer is entitled to the deduction or refund under the election
specified in paragraph (4), the retailer shall include the amount collected in
its first return filed after the collection and pay tax on that amount with the
return.

(B) If the lender is entitled to the deduction or refund under the election
specified in paragraph (4), the lender shall pay the tax to the board in
accordance with Section 6451.

(3) For purposes of this subdivision, the term "lender" means any of the
following:

(A) Any person that holds a retail account which that person purchased
directly from a retailer who reported the tax.

(B) Any person that holds a retail account pursuant to that person's
contract directly with the retailer that reported the tax.

(C) Any person that is either an affiliated entity, under Section 1504 of
Title 26 of the United States Code, of a person described in subparagraph
(A) or (B), or an assignee of a person described in subparagraph (A) or (B).

(4) For purposes of this section, a “proper election” shall be established when the retailer that reported the tax and the lender shall prepare and retain an election, signed by both parties, designating which party is entitled to claim
the deduction or refund. This election may not be amended or revoked unless
a new election, signed by both parties, is prepared and retained by the retailer and the lender.

History.—Added by Stats. 1959, p. 3263, in effect September 18, 1959. Adopted from former Section 6453.5, added by
Stats. 1957, p. 1938, in effect September 11, 1957, except that Section 6203.5 applies solely to use tax, substitutes
"retailer" for "seller," adds the provision for relief from liability, changes from a "credit . . . against the tax shown to be
due on the return" to a "deduction," deletes the requirement that the credit be limited to accounts found to be worthless
and actually charged off "during the period covered by the return," and rearranges wording for clarity. Stats. 1970, p.
1057, in effect November 23, 1970, added to first sentence, "or, if the retailer is not required to file income tax returns,
charged off in accordance with generally accepted accounting principles.", and deleted "for income tax purposes"
from the end of the second sentence. Stats. 2000, Ch. 600 (AB 599), in effect January 1, 2001, added subdivision letter
designation (a) before first paragraph, substituted "that" for "which" after "collect use tax", deleted "subsequent to
September 30, 1957" after "due and payable", substituted "that" for "which" after "by accounts", and added "by the
retailer" after "tax purposes" therein; substituted "A retailer that" for "If the retailer" before "has previously", deleted
", he" after "of the tax", and added "by the retailer" after "charged off" in the second sentence; substituted "these" for
"any such" after "If", deleted "so" after "the amount", substituted "the" for "such" after "return filed after" and
substituted "shall be" for "thereon" after "of the tax" in the third sentence, and added the fourth sentence therein; and
added subdivision (b). Stats. 2011, Ch. 727 (AB 242), in effect January 1, 2012, substituted "A deduction was not" for "No deduction was" before "previously claimed" in subparagraph (A) of paragraph (1) of subdivision (b); and substituted "prepare and retain" for "file" after "the lender shall", deleted "with the board" after "an election", substituted "prepared and retained by the retailer and the lender" for "filed with the board" after "new election, signed by both parties," in paragraph (4) of subdivision (b). Stats. 2012, Ch. 362 (AB 2688), in effect January 1, 2013, substituted "that" for "who" in paragraph (1) and in subparagraphs (A), twice in (B) and in (C) of paragraph (3), substituted "For purposes . . . retailer that" for "Prior to claiming any deduction or refund under this subdivision, the retailer who" after "(4)", and deleted "shall" after "and the lender" in paragraph (4) of subdivision (b).

6204. Tax as debt. The tax required to be collected by the retailer and
any amount unreturned to the customer which is not tax but was collected
from the customer under the representation by the retailer that it was tax
constitutes debts owed by the retailer to this state.

History.—Stats. 1968, p. 1144, in effect November 13, 1968, added the clause "and any amount unreturned to the
customer which is not tax but was collected from the customer under the representation by the retailer that it was
tax."

6205. Unlawful advertising. It is unlawful for any retailer to advertise
or hold out or state to the public or to any customer, directly or indirectly,
that the tax or any part thereof will be assumed or absorbed by the retailer or
that it will not be added to the selling price of the property sold or that if
added it or any part thereof will be refunded.

6206. Separate statement of tax. The tax required to be collected by
the retailer from the purchaser shall be displayed separately from the list
price, the price advertised in the premises, the marked price, or other price
on the sales check or other proof of sales.

6207. Unlawful acts. Any person violating Sections 6203, 6205, or
6206 is guilty of a misdemeanor.

Article 2. Registration

6225. Use tax registration. (a) In order to facilitate the collection of
use tax imposed by this part, a qualified purchaser shall register with the
board on a form prescribed by the board and shall set forth the name under
which the qualified purchaser transacts or intends to transact business, the
location of the qualified purchaser's place or places of business, and other
information as the board may require.

(b) Article 1 (commencing with Section 6451) of Chapter 5 of this part
shall apply to a qualified purchaser, except that a return showing the total
sales price of the tangible personal property purchased by the qualified
purchaser, the storage, use, or other consumption of which became subject to
the use tax during the preceding calendar year, and which was not paid to a
retailer required to collect the tax or which was not paid to a retailer the
qualified purchaser reasonably believed was required to collect the tax, shall
be filed, together with a remittance of the amount of the tax due, with the
board on or before April 15.

(c) A "qualified purchaser" means a person that meets all of the following
conditions:

(1) The person is not required to hold a seller's permit pursuant to this
part.

(2) The person is not required to be registered pursuant to Section 6226.

(3) The person is not a holder of a use tax direct payment permit as
described in Section 7051.3.

(4) The person receives at least one hundred thousand dollars ($100,000)
in gross receipts from business operations per calendar year.

(5) The person is not otherwise registered with the board to report use
tax.

(d) This section shall not apply to the purchase of a vehicle, vessel, or
aircraft as defined in Article 1 (commencing with Section 6271) of Chapter
3.5 of this part.

6226. Registration of retailers. Every retailer selling tangible
personal property for storage, use, or other consumption in this State shall
register with the board and give the name and address of all agents operating
in this State, the location of all distribution or sales houses or offices or other
places of business in this State, and such other information as the board may
require.

Article 3. Presumptions and Resale Certificates

6241. Presumption of purchase for use; resale certificate. For the
purpose of the proper administration of this part and to prevent evasion of
the use tax and the duty to collect the use tax, it shall be presumed that
tangible personal property sold by any person for delivery in this State is
sold for storage, use, or other consumption in this State until the contrary is
established. The burden of proving the contrary is upon the person who
makes the sale unless he takes from the purchaser a certificate to the effect
that the property is purchased for resale.

6242. Effect of certificate. The certificate relieves the person selling
the property from the duty of collecting the use tax only if taken in good
faith from a person who is engaged in the business of selling tangible
personal property and who holds the permit provided for by Article 2
(commencing with Section 6066) of Chapter 2 of this part.

History.—Stats. 1966, p. 176, in effect July 1, 1967, substituted "the duty of collecting the use tax" for "the burden of
proof", added reference to section 6066, and deleted the last clause providing "and who, at the time of purchasing the
tangible personal property, intends to sell it in the regular course of business or is unable to ascertain at the time of
purchase whether the property will be sold or will be used for some other purpose."

6243. Form of certificate. The certificate shall be signed by and bear
the name and address of the purchaser, shall indicate the number of the
permit issued to the purchaser, and shall indicate the general character of the
tangible personal property sold by the purchaser in the regular course of
business. The certificate shall be substantially in such form as the board may
prescribe.

6243.1. Lessors of mobile transportation equipment. Notwithstanding
any other provision of law, any person, other than a person exempt
from payment of use tax in accordance with Section 6352, who leases mobile
transportation equipment and who cannot otherwise properly issue a resale
certificate may issue such a certificate for the limited purpose of reporting
his use tax liability based on fair rental value as provided in subdivision (d)
of Section 6094 and subdivision (d) of Section 6244.

With respect to matters arising out of mergers or acquisitions, the
provisions of this section shall apply to any matters pending before the board
on the effective date of this section.

6244. Liability of purchaser; accommodation loans. (a) If a
purchaser who gives a resale certificate or purchases property for the purpose
of reselling it makes any storage or use of the property other than retention,
demonstration, or display while holding it for sale in the regular course of
business, the storage or use is taxable as of the time the property is first so
stored or used.

(b) If such use is limited to the loan of the property to customers as an
accommodation while awaiting delivery of property purchased or leased
from the lender or while property is being repaired for customers by the
lender, the measure of the tax is the fair rental value of the property for the
duration of each loan so made.

(c) If the property is used frequently for purposes of demonstration or
display while holding it for sale in the regular course of business and is used
partly for other purposes, the measure of the tax is the fair rental value of the
property for the period of such other use or uses.

(d) If the property is mobile transportation equipment as defined in
Section 6023, and the use is limited to leasing the equipment, the purchaser
may elect to pay his use tax measured by the fair rental value, if the election
is made on or before the due date of a return for the period in which the
equipment is first leased. The election must be made by reporting tax
measured by the fair rental value on the return for that period, or in such
other manner as the board may prescribe. Tax must thereafter be paid with
the return for each reporting period, measured by the fair rental value,
whether the equipment is within or without the state. The election may not
be revoked with respect to the equipment as to which it is made.

(e) As used in subdivision (d), the term "fair rental value" means the
rentals required by the purchaser under the lease except where the board
determines that such rentals are nominal. The term shall not include any
reimbursement payments made by the lessee to the purchaser for such use
tax.

History.—Stats. 1965, p. 5448 (First Extra Session), operative August 1, 1965, deleted last sentence providing, "If the
sole use of the property, other than retention, demonstration, or display in the regular course of business, is the rental
of the property while holding it for sale, the purchaser may elect to pay the tax on the use measured by the amount of
the rental charged rather than the sales price of the property to him." Stats. 1967, p. 2062, in effect November 8, 1967,
added most of the language of (b). Stats. 1968, p. 2000, in effect November 13, 1968, divided the former section into
subdivisions, added "or while property is being repaired for customers by the lender" to (b), and added (c). Stats. 1971,
p. 3835, in effect December 16, 1971, operative January 1, 1972, added subdivision (d). Stats. 1978, Ch. 1211, effective
January 1, 1979, deleted the last sentence in (d): "The purchaser's use tax liability may not be charged to the lessee as
separately stated tax or tax reimbursement." Stats. 1980, Ch. 1352, effective September 30, 1980, added (e).
Special Test Equipment Purchased for Resale by Government Contractor.—In order for tax to apply under this section,
the taxable "use" must occur while the purchaser is the owner, since the taxable use is that which is incident to
ownership of the property. Lockheed Aircraft Corp. v. State Board of Equalization; Aerojet General Corp. v. State
Board of Equalization (1978) 81 Cal.App.3d 257.

Use Tax Due is the Price Paid by Taxpayer.—When a taxpayer uses tangible personal property for purposes other than
retention, demonstration or display it must pay use tax based on the price paid by the taxpayer for the goods rather than
the cost to the manufacturer of the raw material used in the manufacture of the property involved. Mercedes Benz v.
State Board of Equalization (1982) 127 Cal.App.3d 871.

6244.5. Leases of qualifying manufacturing property; "cost
price." (a) Notwithstanding any other provision of law, a lessor of tangible
personal property described in Section 17053.49 or 23649, who is
the manufacturer of that property and who leases that property to a qualified
taxpayer, as defined in Sections 17053.49 and 23649, in a form that is not
substantially the same form as acquired, may, in lieu of reporting use tax
measured by the rentals payable, elect to pay tax measured by his or her cost
price of that property if the election is made on or before the due date of the
return for the period in which the property is first leased. The election shall
be made by reporting use tax measured by the cost price on the return for
that period. The election shall not be revoked with respect to the property as
to which it is made. The lease of that property for which an election is made
pursuant to this section shall thereafter be excluded from the terms "sale"
and "purchase."

(b) "Cost price," as used in subdivision (a), means the price at which
similar property has been previously sold or offered for sale. If that property
has not been previously sold or offered for sale, then the cost price shall be
deemed to be the aggregate of the following:

(1) Cost of materials.

(2) Direct labor.

(3) The pro rata share of all overhead costs attributable to the manufacture
of the property.

(4) Reasonable profit from the manufacturing operations which, in the
absence of evidence to the contrary, shall be deemed to be 5 percent of the
sum of the factors listed in paragraphs (1) to (3), inclusive.

History.—Added by Stats. 1996, Ch. 954, in effect September 26, 1996, but operative January 1, 1997.

6245. Resale certificate; fungible goods. If a purchaser gives a
certificate with respect to the purchase of fungible goods, or purchases those
goods for resale in the regular course of business, and thereafter commingles
these goods with other fungible goods not so purchased but of such similarity
that the identity of the constituent goods in the commingled mass cannot be
determined, sales from the mass of commingled goods shall be deemed to be
sales of the goods so purchased until a quantity of commingled goods equal
to the quantity of purchased goods so commingled has been sold. Goods
removed from the commingled mass for consumption shall be deemed to be
consumption of goods not so purchased until a quantity of commingled
goods equal to the quantity of goods not so purchased has been consumed.

History.—Stats. 1943, p. 2455, operative July 1, 1943, renumbered former provision as Section 6246 and added
present provisions. Stats. 1983, Ch. 337, in effect January 1, 1984, added "or purchases . . . business" after the first
"goods" in the first sentence and added the second sentence.

6245.5. Exemption certificate; fuel purchases. (a) A person
qualified under subdivision (b) may issue a certificate to a retailer with
respect to the amount of manufacturers' or importers' excise tax imposed
pursuant to Section 4081 or 4091 of the Internal Revenue Code for purposes
of subparagraph (B) of paragraph (4) of subdivision (c) of Section 6011 or
subparagraph (B) of paragraph (4) of subdivision (c) of Section 6012 when
purchasing fuel from the retailer.

(b) A person is qualified for purposes of this section if all of the following
conditions are met:

(1) The person was entitled to either a direct refund or credit against his
or her income tax for the manufacturers' or importers' excise tax imposed
pursuant to Section 4081 or 4091 of the Internal Revenue Code for more
than 50 percent of the person's purchases of fuel during the prior calendar
year.

(2) The person's business remains substantially the same as during the
prior calendar year whereby the person expects to be entitled to either a
direct refund or credit against his or her income tax for the manufacturers' or
importers' excise tax imposed pursuant to Section 4081 or 4091 of the
Internal Revenue Code for more than 50 percent of the person's purchases of
fuel.

(3) The person holds a valid California seller's permit.

(c) A person issuing a certificate for purposes of subparagraph (B) of
paragraph (4) of subdivision (c) of Section 6011 or subparagraph (B) of
paragraph (4) of subdivision (c) of Section 6012 is liable for use tax on the
amount of the manufacturers' or importers' excise tax imposed pursuant to
Section 4081 or 4091 of the Internal Revenue Code if the person used fuel
purchased under the certificate in a manner whereby the person is not entitled
to a direct refund or credit against his or her income tax of the federal excise
tax.

(d) A person liable for the use tax under subdivision (c) of this section
shall report and pay that use tax with the return for the reporting period in
which the person uses the fuel in such a manner that the person is not entitled
to a direct refund or credit against his or her income tax of the federal excise
tax.

6246. Presumption of purchase from retailer. It shall be further
presumed that tangible personal property shipped or brought to this State by
the purchaser was purchased from a retailer on or after July 1, 1935, for
storage, use, or other consumption in this State.

6247. Presumption of use; out-of-state delivery. On and after the
effective date of this section, it shall be further presumed that tangible
personal property delivered outside this State to a purchaser known by the
retailer to be a resident of this State was purchased from a retailer for storage,
use or other consumption in this State and stored, used or otherwise
consumed in this State.

This presumption may be controverted by a statement in writing, signed
by the purchaser or his authorized representative, and retained by the vendor,
that the property was purchased for use at a designated point or points outside
this State. This presumption may also be controverted by other evidence
satisfactory to the board that the property was not purchased for storage, use,
or other consumption in this State.

History.—Added by Stats. 1953, p. 3385, in effect September 9, 1953.

Out-of-state border stores do not have to collect use tax on over-the-counter credit sales.—A retailer otherwise engaged
in business in California does not have to collect California use tax on over-the-counter credit sales at the retailer's
stores in Klamath Falls, Oregon, and Reno, Nevada, to customers with charge accounts bearing a California address.
Montgomery Ward & Co. v. State Board of Equalization (1969) 272 Cal.App.2d 728, cert. denied (1970) 396 U.S.
1040.

6248. Presumption of purchase for use; vehicles, vessels, and
aircraft. (a) On and after the effective date of this section there shall be a
rebuttable presumption that any vehicle, vessel, or aircraft bought outside of
this state, and which is brought into California within 12 months from the
date of its purchase, was acquired for storage, use, or other consumption in
this state and is subject to use tax if any of the following occur:

(1) The vehicle, vessel, or aircraft was purchased by a California resident
as defined in Section 516 of the Vehicle Code.

(2) In the case of a vehicle, the vehicle was subject to registration under
Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle
Code during the first 12 months of ownership.

(3) In the case of a vessel or aircraft, that vessel or aircraft was subject to
property tax in this state during the first 12 months of ownership.

(4) The vehicle, vessel, or aircraft is used or stored in this state more than
one-half of the time during the first 12 months of ownership.

(b) This presumption may be controverted by documentary evidence that
the vehicle, vessel, or aircraft was purchased for use outside of this state
during the first 12 months of ownership. This evidence may include, but is
not limited to, evidence of registration of that vehicle, vessel, or aircraft,
with the proper authority, outside of this state.

(c) This section does not apply to any vehicle, vessel, or aircraft used in
interstate or foreign commerce pursuant to regulations prescribed by the
board.

(d) The amendments made to this section by the act adding this
subdivision do not apply to any vehicle, vessel, or aircraft that is either
purchased, or is the subject of a binding purchase contract that is entered
into, on or before the operative date of this subdivision.

(e) (1) Notwithstanding subdivision (a), aircraft or vessels brought into
this state for the purpose of repair, retrofit, or modification shall not be
deemed to be acquired for storage, use, or other consumption in this state.

(2) This subdivision does not apply if, during the period following the
time the aircraft or vessel is brought into this state and ending when the
repair, retrofit, or modification of the aircraft or vessel is complete, more
than 25 hours of airtime in the case of an airplane or 25 hours of sailing time
in the case of a vessel are logged on the aircraft or vessel by the registered
owner of that aircraft or vessel or by an authorized agent operating the
aircraft or vessel on behalf of the registered owner of the aircraft or vessel.
The calculation of airtime or sailing time logged on the aircraft or vessel
does not include airtime or sailing time following the completion of the
repair, retrofit, or modification of the aircraft or vessel that is logged for the
sole purpose of returning or delivering the aircraft or vessel to a point outside
of this state.

(3) This subdivision applies to aircraft or vessels brought into this state
for the purpose of repair, retrofit, or modification on or after the operative
date of this subdivision.

(f) The presumption set forth in subdivision (a) may be controverted by
documentary evidence that the vehicle was brought into this state for the
exclusive purpose of warranty or repair service and was used or stored in
this state for that purpose for 30 days or less. The 30-day period begins when
the vehicle enters this state, includes any time of travel to and from the
warranty or repair facility, and ends when the vehicle is returned to a point
outside the state. The documentary evidence shall include a work order
stating the dates that the vehicle is in the possession of the warranty or repair
facility and a statement by the owner of the vehicle specifying dates of travel
to and from the warranty or repair facility.

(g) The amendments made by Section 2 of Chapter 226 of the Statutes of
2004 adding this subdivision shall become operative on October 1, 2004.

(h) The Legislative Analyst's office shall conduct a study of the economic
impacts of the amendments made to this section by the act adding this
subdivision, and shall report its findings to the Legislature on or before June
30, 2006.

(i) This section shall remain in effect only until and including June 30,
2007, and as of July 1, 2007, is repealed.

History.—Added by Stats. 1963, p. 3834, operative October 1, 1963. Stats. 2004, Ch. 226 (SB 1100), in effect August
16, 2004, revised entire statute which read, "On and after the effective date of this section there shall be a rebuttable
presumption that any vehicle bought outside of this State which is brought into California within 90 days from the date
of its purchase, and which is subject to registration under Chapter 1 (commencing with Section 4000) of Division 3 of
the Vehicle Code, was acquired for storage, use, or other consumption in this State." Stats. 2006, Ch. 49 (AB 1809), in
effect June 30, 2006, substituted "state, and" for "State" after "outside of this" in subdivision (a); substituted "Section 2 of Chapter 226 of the Statutes of 2004" for "the act" after "The amendments made by" in subdivision (f); substituted
"and including June 30, 2007" for "July 1, 2006" after "effect only until" and substituted "July 1, 2007," for "that date"
after "and as of" in subdivision (h). Stats. 2006, Ch. 352 (AB 2239), in effect September 20, 2006, added subdivision (f),
and relettered former subdivisions (f), (g), and (h) as (g), (h), and (i), respectively.

6248. Presumption of purchase for use; vehicles, vessels, and
aircraft. (a) There shall be a rebuttable presumption that any vehicle,
vessel, or aircraft bought outside of this state on or after the effective date of
this section, and which is brought into California within 12 months from the
date of its purchase, was acquired for storage, use, or other consumption in
this state and is subject to use tax if any of the following occurs:

(1) The vehicle, vessel, or aircraft was purchased by a California resident
as defined in Section 516 of the Vehicle Code. For purposes of this section, a
closely held corporation or limited liability company shall also be
considered a California resident if 50 percent or more of the shares or
membership interests are held by shareholders or members who are residents
of California as defined in Section 516 of the Vehicle Code.

(2) In the case of a vehicle, the vehicle was subject to registration under
Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle
Code during the first 12 months of ownership.

(3) In the case of a vessel or aircraft, that vessel or aircraft was subject to
property tax in this state during the first 12 months of ownership.

(4) If purchased by a nonresident of California, the vehicle, vessel, or
aircraft is used or stored in this state more than one-half of the time during
the first 12 months of ownership.

(b) This presumption may be controverted by documentary evidence that
the vehicle, vessel, or aircraft was purchased for use outside of this state
during the first 12 months of ownership. This evidence may include, but is
not limited to, evidence of registration of that vehicle, vessel, or aircraft,
with the proper authority, outside of this state.

(c) This section shall not apply to any vehicle, vessel, or aircraft used in
interstate or foreign commerce pursuant to regulations prescribed by the
board.

(d) The amendments made to this section by the act adding this
subdivision shall not apply to any vehicle, vessel, or aircraft that is either
purchased, or is the subject of a binding purchase contract that is entered
into, on or before the operative date of this subdivision.

(e) Notwithstanding subdivision (a), any aircraft or vessel brought into
this state exclusively for the purpose of repair, retrofit, or modification shall
not be deemed to be acquired for storage, use, or other consumption in this
state if the repair, retrofit, or modification is, in the case of a vessel,
performed by a repair facility that holds an appropriate permit issued by the
board and is licensed to do business by the city, county, or city and county in which it is located if the city, county, or city and county so requires, or,
in the case of an aircraft, performed by a repair station certified by the
Federal Aviation Administration or a manufacturer's maintenance facility.

(f) The presumption set forth in subdivision (a) may be controverted by
documentary evidence that the vehicle was brought into this state for the
exclusive purpose of warranty or repair service and was used or stored in
this state for that purpose for 30 days or less. The 30-day period begins when
the vehicle enters this state, includes any time of travel to and from the
warranty or repair facility, and ends when the vehicle is returned to a point
outside the state. The documentary evidence shall include a work order
stating the dates that the vehicle is in the possession of the warranty or repair
facility and a statement by the owner of the vehicle specifying dates of travel
to and from the warranty or repair facility.

History.—Added by Stats. 2004, Ch. 226 (SB 1100), in effect August 16, 2004. Stats. 2006, Ch. 49 (AB 1809), in effect
June 30, 2006, substituted "2007" for "2006" after "July 1," in subdivisions (a) and (b), and substituted "state" for "State"
after "in this" twice in subdivision (a). Stats. 2008, Ch. 763 (AB 1452), in effect September 30, 2008, revised entire
statute which read, "(a) On and after July 1, 2007, there shall be a rebuttable presumption that any vehicle bought
outside of this state which is brought into California within 90 days from the date of its purchase, and which is subject
to registration under Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, was acquired for
storage, use, or other consumption in this state. (b) This section shall become operative on July 1, 2007."; and added
new subdivisions (b), (c), (d), (e), and (f). Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010, substituted "There"
for "On and after the effective date of this section, there" and added "on or after the effective date of this section" after
"of this state" in subdivision (a), added second sentence in subdivision (1) and substituted "If purchased by . . . the"
before "vehicle, vessel" in subdivision (4) of subdivision (a); deleted subdivision number designation (1) in subdivision
(e) and added "exclusively" after "into this state" and "if the repair . . . maintenance facility" after "in this state"
therein; deleted former subdivisions (2) and (3) of subdivision (e), which provided the following: "(2) This subdivision
shall not apply if, during the period following the time the aircraft or vessel is brought into this state and ending when
the repair, retrofit, or modification of the aircraft or vessel is complete, more than 25 hours of airtime in the case of an
airplane or 25 hours of sailing time in the case of a vessel is logged on the aircraft or vessel by the registered owner
of that aircraft or vessel or by an authorized agent operating the aircraft or vessel on behalf of the registered owner of
the aircraft or vessel. The calculation of airtime or sailing time logged on the aircraft or vessel shall not include airtime
or sailing time following the completion of the repair, retrofit, or modification of the aircraft or vessel that is logged for
the sole purpose of returning or delivering the aircraft or vessel to a point outside of this state. (3) This subdivision
shall apply to aircraft or vessels brought into this state for the purpose of repair, retrofit, or modification on or after the
operative date of this subdivision." Stats. 2010, Ch. 328 (SB 1330), in effect January 1, 2011, substituted "company" for "corporation" after "limited liability" in paragraph (1) of subdivision (a). Stats. 2011, Ch. 727 (AB 242), in effect January 1, 2012, added "city," after "business by the", added ", or city and county" after "county", and added "if the city, county, or city and county so requires" after "in which it is located" in subdivision (e).

6249. Exemption; member of armed services. A member of the
armed services on active duty who purchases a vehicle prior to the effective
date of his discharge shall not be subject to the presumption established by
Section 6248. He shall not be deemed to have purchased the vehicle for
storage, use or other consumption in this State unless at the time of purchase
he intended to use it in this State, such intent resulting from his own
determination, rather than from official orders received as a member of the
armed services transferring him to this State.

History.—Added by Stats. 1963, p. 3834, operative October 1, 1963.

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